An Introduction to the Not-for-Profit Sector in China

By Nick Young and Anthony Woo
Reviewed
by Georgina McCaughan, ICNL Legal Intern, American University, Washington College of Law, 2002

Introduction

The Charities Aid Foundation’s (CAF) publication “An Introduction to the Not-for-Profit Sector in China” by Nick Young with Anthony Woo provides a comprehensive overview of the not-for-profit sector in China, including it s current status and future needs. The book is a useful tool for those who may be interested in funding a Chinese organization or doing work in China with partner organizations, not only because of the information regarding the not-for-profit sector, but also for the informative history that is provided about China’s people, government and culture. The book identifies the areas in which foreign donations are needed and eagerly accepted, and it provides descriptions of various organizations active in different areas of not-for-profit work with valuable contact information, including e-mail and/or website addresses. A listing of companies and organizations, which are already funding some of these not-for-profit organizations, is also included. Finally, the glimpse into the not-for-profit sector in Hong Kong also provides insightful and helpful information in grant-making options in this part of China.

The Developing Not-for-Profit Sector: an Historical Overview

This book discusses the complications that have arisen between the government and the expanding not-for-profit sector in China in the recent past. The not-for-profit sector in China began to develop when the economic reform began in 1979. As the government, economy, and society changed in China the government began looking for new ways to attend to social services. The sector as of 1996 had more than 200,000 social organizations officially registered with the Ministry of Civil Affairs. But, it is hard to really assess the size of the sector because many organizations are not officially registered and are sub-units of other organizations or are affiliated with research centers.

Although it is not discussed in this book, research by ICNL and others indicates that the original rationale permitting the development of quasi-state organizations in China was to encourage resources from outside China to be contributed to address social and economic needs identified by the government. This fact should be borne in mind when deciding work in China with existing Chinese organizations. (For further information please see “State Power and the Philanthropic Impulse in China Today” by Dr. Vivienne Shue (1995) and “Emerging Chinese Foundations: The Role of Private Philanthropy in the New China by Dr. Richard J. Estes (1996). (Both publications available in the ICNL database).

Data about Chinese Organziations

The CAF book lists and describes the various kinds of not-for- profit organizations (NPOs), referred to in China as “social organizations”, that are permitted to register including: mass organizations, government-initiated organizations, networks, advocacy groups, and international organizations. Numerous descriptions of established organizations are provided, including those involved in: education, art and culture, environment, ethnic minorities, Tibet, health, human rights, poverty alleviation and rural development, welfare, and women’s groups. The list is comprehensive, with a clear synopsis about each organization, so that any potential grant-maker or foreign partner can find a not-for-profit Chinese organization that matches its interest. Also provided for further research on organizations is the contact information of international groups working with the not-for-profit sector in China. Some of these organizations are based outside of China, principally in England and the United States.

Funding and Legal Framework

The funding of Chinese not-for-profit organizations is also analyzed and broken down among various sources. The largest source of NPO revenue is government funding. Other sources include: the overseas Chinese community, the non-Chinese international community, sideline commercial activities, and individual and corporate donors in mainland China. Although the trend is towards greater financial independence from the government, it is hard to estimate the funding levels and sources of the funding because NPOs are not required to publish their financial reports. The government does encourage corporate indigenous philanthropy to fund the NPOs.

Each of the non-government funding sources is described and examples are provided for each type of donor. Also provided is a description of the legal framework and the latest set of regulations for NPOs, which were put into effect in 1998. The main provisions are briefly discussed, as are certain provisions in China’s taxation system with respect to NPOs and donations. The book emphasizes that the provisions highlight the government’s desire for the NPOs to emphasize their close relationship to the government by making it impossible for them to register without government consent. The book also discusses the difficulties which smaller NPOs have in registering with the government, which also makes it difficult for funders to support them or for international organizations to partner with them, because they are difficult to find.

Needs of the Not-for-Profit Sector in China

Another important feature of this CAF book for a potential grant-maker or foreign partner is the identification of the needs of the not-for-profit sector. They range from better fundraising strategies to the need for greater independence of the NPOs from the government. Improved institutional planning and development are also called for, including collaboration with overseas NPOs, better information and communication between organizations, and improved governance and accountability. This section provides a potential funder or partner with a good understanding of how Chinese NPOs function and the problems these organizations may face in carrying out their projects.

Hong Kong’s Not-for-Profit Sector

A brief overview of Hong Kong’s NPOs illustrates a sector which is heavily involved with social welfare and which is subsidized by the Hong Kong government. Services provided by NPOs include family and child welfare services, community services, activity centers, hostels, and recreation centers. A number of NPOs are listed with brief descriptions and contact information.

Conclusion

This book provides a comprehensive overview of the not-for-profit sector in China for any potential grant makers. Additional information concerning grant making in China can be found in the Volume I Issue 2 IJNL article: Options For Increasing U.S. Support For Chinese Nonprofit Organizations by Robert A. Boisture (1998) of Caplin & Drysdale, Washington, D.C.